Buy and Sell Agreement Insurance

Buy and Sell Agreements are essentially agreements made between the partners or the shareholders of a business defining the consequences of a death or an illness of one of the partners. In case if buy and sell agreements do not exist, then in the event of death, the shares would roll over to the deceased or critically ill partner’s family. The important point to note is that the shareholders had initially come together to do the business together and each one, probably, brought his or her expertise.

Here is a question: Is the deceased partner’s family capable to co-manage the business, would the other shareholder like to do business with the family of the deceased partner? Therefore, there is life insurance that is taken out on the lives of the shareholders. Upon the death of one of the shareholders, the life insurance will pay out a benefit equal to the value of the share. That amount is paid to the family of the deceased shareholder and in return the shares are relinquished. There could be several types of insurance policies that could be purchased.

We at YourInsuranceGuy.ca are experts in explaining the the various types of life insurance that could protect the business and the interest of the shareholders. Please feel free to contact us at aman@yourinsuranceguy.ca or at 1 416 509 2540. Please visit us for a no obligation quote or advice.